Etihad Airways wins Airfinance Journal award

Etihad Airways, the national airline of the United Arab Emirates, has won the Airfinance Journal “Middle East Deal of the Year” award. The prestigious accolade was awarded to Etihad Airways for the combination of its equity investment and subsequent aircraft pre-delivery payment (PDP) shareholder loan financing facility to airberlin.

Judges
credited the Abu Dhabi-based airline for the deal and the “significant work undertaken
to ensure adherence to finance regulations” and the “speed at which the parties
were able to structure and close the transaction”.

James Hogan, Etihad Airways’ President and Chief
Executive Officer, said: “The benefits and positive impact, brought by our
equity acquisition, to Etihad Airways and airberlin, have been well documented
and this award is fantastic recognition of that and the in-depth work that went
into securing the initial deal.”

“The partnership
has had a considerable impact on both airlines, in terms of revenue and
passenger numbers, as well as the
aviation industry overall as it has shown the tangible benefits gained by all
member airlines within Etihad Airways’ equity alliance.”

Dickon
Harris, Airfinance Journal editor, said: “This is an exceptional deal which saw
Etihad Airways offer a sophisticated financing structure that has helped
transform the fortunes of airberlin. Etihad Airways wins this award for its
innovative approach that was completed without the help of investment banks.
The total transaction, which includes an extremely large PDP financing,
significantly lowers the price that airberlin will need to pay for its upcoming
deliveries.”

More than
300,000 additional passengers flowed into the networks of Etihad Airways and
airberlin in 2012 and that figure is set to increase considerably in 2013 as
the impact of closer cooperation across almost every division of each carrier
comes to fruition.

The
partnership with airberlin has also expanded Etihad Airways’ network reach and
provided the airline with further opportunity for global growth.

The PDP
loan, a key factor in Etihad Airways winning the Airfinance Journal award,
added greater complexity to the airberlin deal as it required an agreement
between airberlin, Etihad Airways and Boeing.

The PDP
loan was required to have a customised drawdown and repayment
profile whilst ensuring sufficient security was in place at all times to Etihad
Airways in the form of PDP balances and the equity in future airberlin aircraft
order positions.

The US$255
million facility is a shareholder loan secured by PDP deposits and the equity
in future order positions. It unlocked the liquidity equivalent to the value of
the PDP’s and orders for airberlin and is secured by Boeing 737 and Boeing 787
advance payments and orders.